R. Jayasimha Babu, J.
1. The assessee is a charitable trust, which was denied exemption from wealth-tax by the Assessing Officer for the assessment years 1987-88 and 1988-89 on the ground that it had made investment contrary to Section 13(1)(d) of the Income-tax Act, 1961.
2. The Commissioner reversed the order of the Assessing Officer and that reversal was sustained by the Tribunal. At the instance of the Revenue, the following question has been referred to us for consideration :
'Whether the Tribunal was right in holding that the assessee-trust is exempt from wealth-tax under Section 5(1) of the Wealth-tax Act without considering the provisions of Section 21A(iii) which was brought into effect from April 1, 1985 ?'
3. It is no doubt true that Section 21A(iii) of the Wealth-tax Act, which came into force on April 1, 1985, provides that if any funds of the trust are invested or deposited, or any shares in a company are held by the trust in contravention of the provisions of Clause (d) of Sub-section (1) of Section 13 of the Income-tax Act, the properties of such trust would be subject to wealth-tax.
4. The Tribunal was in error in holding that the contravention of Section 13(1)(d) of the Income-tax Act was not relevant for the purpose of considering the assessee's claim for exemption from wealth-tax.
5. This, however, is not the end of the matter as, though the investments made by the assessee-trust in these years are not in accordance with Section 13(1)(d) of the Income-tax Act, that would not result in the assessee being deprived of the benefit of the exemption, either under the Income-tax Act or under the Wealth-tax Act, as the time for disinvesting from such investments and making investments in accordance with the requirements of Section 13 of the Income-tax Act had been extended by the Finance (No. 2) Act, 1991, read with the Finance Act, 1992, up to March 31, 1993, and that amendment had also been given retrospective effect from April 1, 1983. This court has, in a case under the Income-tax Act referred to those provisions and upheld a claim for exemption of a trust in the case of Director of Income-tax (Exemptions) v. Sir M. Ct. Muthiah Chettiar Family Trust : [2002]257ITR287(Mad) .
6. While answering the question referred to us in favour of the Revenue, we make it clear that the assessee is entitled to exemption for these assessment years, having regard to what has been said in the preceding paragraphs.